Florida Appellate Court Finds Circuit Court Exceeded Its Authority By Rewriting Terms Of Note And Mortgage


Florida’s Fourth DCA recently reversed (in part) a final judgment (“Judgment”) entered in favor of the mortgagors (“the Saunders”) and against US Bank wherein the circuit court denied foreclosure and essentially rewrote the terms of the note and mortgage. U.S. Bank Nat’l Ass’n v. Saunders, No. 4D22-1658, 2023 WL 5598399 (Fla. 4th DCA Aug. 30, 2023).

In May 2022, Judge Croom (Indian River County) denied foreclosure to US Bank for reasons outside the scope of this article. Instead of simply dismissing the foreclosure action, Judge Croom formulated a “resolution” which failed to account for almost twelve[i] years of missed payments, eliminated $6,700 in deferred principle, and failed to recognize and enforce several essential terms of the note, mortgage and (mortgage) modification agreement.[ii] The pertinent provision of the Judgment read:

  1. Based on the foregoing findings of fact and the procedural history of the foreclosure proceedings involving Defendants’ Mortgage…the Court hereby Orders that the total Mortgage balance, to include any and all fees and costs is $111,654.63 as of May 2, 2022. Said sum shall be paid back by Defendants to Plaintiff pursuant to the terms and conditions of the Loan Modification Agreement between the parties dated June 8, 2010. Repayment shall commence June 1, 2022[,] with an initial principal, interest, taxes and insurance monthly payment of $634.44.

US Bank appealed the Judgment and Diaz Anselmo & Associates P.A., represented appellant. US Bank argued that (i) the trial court granted relief beyond that requested by the Saunders in their pleadings and (ii) that the court exceeded its equitable authority by rewriting the parties’ agreement.[iii] The Fourth DCA agreed with US Bank on both points.

Firstly, the DCA explained that the Saunders did not request amendment of the loan documents in their pleadings, so granting that relief was outside the scope of the pleadings and therefore improper. Secondly, the DCA noted that the court “negated essential contractual terms favorable to the Bank” which the court lacked the authority, equitable or otherwise, to do. The terms of the Judgment effectively rewrote the parties’ agreement.

The Court, quoting the Second DCA, explained: [I]n determining whether to grant the equitable relief of foreclosure, the trial court is not at liberty to modify terms of a note and mortgage that are unambiguous and undisputed…[iv] The Fourth DCA concluded Judge Croom could and did rely on his equitable powers to deny foreclosure; however, the Court explained “equitable considerations cannot justify rewriting the terms of the parties’ agreements.”[v] The DCA remanded the matter to the lower tribunal to amend its judgment to “simply deny foreclosure.”

[i] The borrowers defaulted by failing to make their May 2010 payment. Although this information in not included in the written opinion, since Diaz Anselmo and Associates handled the foreclosure action and appeal, additional details about the case are known which may be outside the scope of the written opinion.

[ii] Saunders, at *1. All future references and quotations to this case are to this citation unless indicated otherwise.

[iii] Saunders, at *3. All future references and quotations to this case are to this citation unless indicated otherwise.

[iv] Saunders, at *2 (quoting Ivy Chase Apartment Property, LLC v. Ivy Chase Apartments, Ltd., 352 So. 3d 33, 43 (Fla. 2d DCA 2022)).

[v] Saunders, at *4 (quoting Ivy Chase Apartment Property, LLC, 352 So. 3d at 43).